China Emerges as Top Greenfield Foreign Direct Investor in Saudi Arabia
In a surprising turn of events, China has taken the lead as the top greenfield foreign direct investor in Saudi Arabia, pouring in a staggering $16.8 billion in investments in 2023. This marks a jaw-dropping 1,020 percent increase from the previous year.
Following Close Behind
Following China’s lead, the US and the UAE secured the second and third spots with greenfield FDI amounts of $2.7 billion and $2.67 billion, respectively. Kuwait and Hong Kong rounded out the top five with $937 million and $796 million investments, respectively.
Greenfield FDI Explained
For those unfamiliar, greenfield FDI involves a parent company establishing a new venture in a foreign country by constructing operational facilities from scratch.
Saudi Arabia’s Ambitious Goals
Saudi Arabia has set its sights on attracting over $100 billion in FDI by 2030, as the Kingdom continues to diversify its economy and reduce its reliance on oil.
Major Chinese Investments
A significant portion of China’s investments, totaling $5.6 billion, flowed into the automotive original equipment manufacturing sector. This investment was sealed through a partnership between Human Horizons and the Kingdom’s Ministry of Investment at the Arab-China business conference in June 2023.
In addition, China also directed $5.26 billion towards the metals sector and $4.26 billion towards the semiconductor sector in Saudi Arabia.
Record Inflows and Key Locations
Overall, the total greenfield FDI in Saudi Arabia soared by 110 percent year-on-year to reach $28.78 billion in 2023. While this surpasses the 2018 high of $17.57 billion, it falls short of the record set in 2008 at $34.26 billion.
Riyadh emerged as the top destination for greenfield FDI, attracting $8.18 billion, followed by Ras Al-Khair and Dammam with $4.23 billion and $772 million, respectively.
Investments in the Tourism Sector
The tourism sector in Saudi Arabia also saw significant investments, with a total of $227 million flowing in. Notable acquisitions include the opening of a 223-room hotel in Riyadh Convention and Exhibition Center by US-based Radisson Hospitality, costing an estimated $112 million.
Furthermore, Liechtenstein-based Olayan Investment Co. Establishment invested around $112 million to develop The Mondrian Riyadh Al-Malga Hotel and Residences, a 200-room hotel set to open in 2026 and operated by UK-based Ennismore.